Elliott Wave Outlook of Nifty for Oct 2017 Expiry Week

| October 22, 2017

Nifty opened flat at 10210 on Thursday (Muhurat Trading) but traded with weakness for rest of the day. Nifty declined more than 80 point within 1 hour of Muhurat trading and finally closed 64 points down at 10146.

Thursday, I expected Nifty to bounce again above 10251 in coming sessions with 10137 as breakeven point on downside. Trading strategy was Buying on Dips and I suggested buying Nifty Oct 10100 Call if get Nifty in 10150-10137 range using stoploss of 10123.

Nifty declined till 10123.25 and closed at 10146. Oct 10100 Call was available in 60-70 range. Let’s have a fresh look at latest charts for further scenario.

Today I am covering bounce from 28 Sep 2017 low 9687 and earlier wave counts are explained in my previous analysis report Elliott Wave Outlook of Nifty for 16 Oct 2017 Onward 

Elliott Wave analysis of Nifty for Oct 2017 Expiry

Elliott Wave analysis of Nifty for Oct 2017 Expiry

This is 30 minutes time bar chart of Nifty covering bounce from low 9687 which I marked as start of new upside impulse. (Explained in my last analysis report). The market move of 19 Oct 2017 (from 10210-10123) was not updated on my charting application so I drawn an imaginary line to show the same.

It seems wave (C) of irregular correction is already completed at 9687 and new upside Impulse for new high above 10178 has been started. Earlier high 10178 already breached and Nifty registered new high 10251.

And within the bounce from 9687, the wave started gradually but picked up speed after 9955 and there is also an Irregular Correction from 10015-9955 before picking speed. So after seeing the structure and personality of move, the most probable wave counts are: –

May be wave (1) completed from 9786-9945, (2) completed from 9945-9881 and wave (3) may be in progress from 9881. 38% retracement of progress of whole wave (3) is placed at 10109, so 10109 is the breakeven point below which we can think of any medium term reversal.

Further within wave (3), it seems inner wave (i) completed from 9881-10015, (ii) completed from 10015-9955 as Irregular correction and (iii) may be completed at 10251 or still in progress.

Now, we need to analyze the progress of wave (iii) of (3) started from 9955 separately on lowest possible time frame chart to calculate short term levels.

Elliott Wave analysis of Nifty for Oct 2017 Expiry

Elliott Wave analysis of Nifty for Oct 2017 Expiry

This is 15 minutes time chart of Nifty covering bounce after 9955 which I marked as start of inner wave (iii) of (3) on 30 minute chart. (The market move of 19 Oct 2017 (from 10210-10123) was not updated on my charting application so I drawn an imaginary line to show the same)

This bounce again seems impulsive with inner wave 1 completed from 9955-10036, wave 2 completed from 10036-10007, wave 3 may be completed from 10007-10251 and wave 4 may be completed at 10123, though wave 4 retraced deeper than 38% retracement 10137.

If wave 4 completed at 10123 then minimum 38%-61% projection for wave 5 is placed at 10236-10305 but end of wave 3 is 10251. So, minimum target range for wave 5 is 10251-10305.

Wave 4 in this pattern already retraced deeper than normal 38%, so breaking below 10123 again can negate the whole pattern I had explained on this chart. 

Conclusion

Overall outlook of Nifty is still bullish for 10251-10305 as long as Nifty is trading above 10123. Breaking below 10123 again can negate the whole pattern and Nifty can decline further but exact pattern can be indentified only after break down.

10109 is medium term breakeven point at this moment below which we can think of any medium term reversal.

Trading Point of View:

The overall trend is still bullish so Short term trading strategy must be “Buying on Dips” whenever getting opportunity and risk reward as long as Nifty is trading above 10123-10109 and shorts can be avoided for time being until we see any clear bearish pattern.

Nifty 10100 Oct call taken in 10150-10137 range on Friday (Muhurat Trading) can be hold with same stoploss of 10123 expecting minimum upside targets 10251-10305. 10100 Call was available at 60-70 range on Friday according to conditions. Modify stoploss of trade to cost one Nifty breaks above 10210.

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Category: Nifty

About the Author ()

Deepak Kumar is an independent Technical Analyst, regular practitioner and Trainer of Elliott wave theory applying Elliott's Wave Principles on Indian Markets successfully since 2011 and made many accurate predictions. He is also the author of book "Practical Application of Elliott's Wave Principles by Deepak Kumar"

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